More red ink for PGS

PGS has seen its Q2 2020 loss widened, as revenues fell more than 50 percent.

The Oslo-listed seismic player reported quarterly loss of $111.4 million, or 29 cents per share on revenues of $90 million.

This result compares against loss of $49 million, or 14 cents per share on $192 million revenues in the prior-year quarter.

The company also booked quarterly impairment and loss on sale of non-current assets and MC library of some $80 million.

For the first six months of 2020 PGS recognised loss of $229 million, compared to $114 million in 1H 2019.

Revenues were also down from $328 million in 1H 2019 to $219 million in the second half of 2020.

PGS secured order book of $155 million, down almost half from $300 million compared to Q2 2019.

During Q2 PGS cold-stacked PGS Apollo and Sanco Swift, and also completed the stacking of Ramform Vanguard early Q3.

The company added that it will evaluate further capacity reductions.

Rune Olav Pedersen, president and CEO of PGS, said:

“The Covid-19 pandemic has caused widespread disruptions in the oil market and a significant reduction in energy companies’ 2020 budgets.

“This has led to reduced demand for seismic data and deferral of seismic projects, requiring a rapid response from PGS to manage vessel supply and costs.

With five vessels in operation for the remaining part of 2020, PGS expects full year 2020 gross cash costs to be approximately $450 million.

This excludes severance and other restructuring costs of approximately $35 million.

PGS said that 2020 MultiClient cash investments should be in the range of $175-200 million.

Also, approximately 50 per cent of 2020 active 3D vessel should allocate to MultiClient acquisition.

Capex for 2020 should drop from $80 million to at least $40 million.

“We are in the process of completing a comprehensive reorganization whereby our office based personnel is reduced by approximately 40 per cent, including reductions implemented earlier this year.

“In combination with other initiatives, these measures are expected to reduce our annual gross cash cost run rate to approximately $400 million, compared to approximately $600 million at the start of the year,” Pedersen said.